OPTION AGREEMENT Silver Queen and Klondyke Properties, Nevada
Exhibit 10.1
Silver Queen and Klondyke Properties, Nevada
This Option Agreement (this "Agreement") entered into as of the 19th day of August, 2011,
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BETWEEN:
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MGOLD RESOURCES INC., a legal person duly constituted under the laws of Quebec, having its head office at 0 Xxxxx Xxxxx-Xxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxx X0X 0X0, herein acting and represented by Mr. Joel Scodnick, its President and Chief Executive Officer, duly authorized for the purposes of this Agreement, as he so declares;
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(“MGold”)
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AND:
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SILVER RESERVE CORP., a legal person duly constituted under the laws of Delaware having an office at Xxxxx 000-x, 0000 Xxxxxxxx Xxx, Xxxx, Xxxxxx, XXX 00000, herein acting and represented by Mr. Xxxx Xxxxxxxxxx, its Chief Executive Officer, duly authorized for the purposes of this Agreement, as he so declares;
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(“SRC”)
WHEREAS, SRC is the recorded owner of a 100% interest in and to the mining titles comprising the Silver Queen Property as further described in Schedule A to this Agreement (the “Silver Queen Property”) and the Klondyke Property as further described in Schedule A to this Agreement (the “Klondyke Property”) located in Xxxxxxxxx County, Nevada;
WHEREAS, the Silver Queen Property and the Klondyke Property together are referred to herein as the “Properties” and MGold and SRC are sometimes referred to herein as the “Parties” or individually as a “Party;”
WHEREAS, MGold and SRC entered into a letter of intent dated June 8, 2011 (the “Letter of Intent”) pursuant to which SRC indicated its intent to grant to MGold:
(a) the option to earn an undivided 50% interest in the Silver Queen Property by completing cash payments in the aggregate of $2,000,000 over a thirty three (33) month period and by incurring work expenditure (as hereinafter described and referred to as “Silver Queen Option Costs”) of $4,000,000 over a thirty (30) month period on the Silver Queen Property, all subject to the terms and conditions herein; and
(b) the option to earn an undivided 50% interest in the Klondyke Property by completing cash payments in the aggregate of $265,000 over a thirty three (33) month period and by incurring work expenditure (hereinafter referred to as “Klondyke Option Costs”) of $1,350,000 over a thirty (30) month period on the Klondyke Property, all subject to the terms and conditions herein.
WHEREAS this Option Agreement is intended to supersede the Letter of Intent and be binding upon the Parties.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and upon and subject to the terms and conditions hereafter set out, the Parties agree as follows:
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1.
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Option and Joint Venture
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(a) MGold will have an option (the “Option”) to acquire a 50% working interest in and to each of the Silver Queen Property and the Klondyke Property, which Option shall be exercised by MGold incurring Option Costs and making cash payments as specified below. The earning of such interest and transfer of title to the Properties will only occur once the Option has been fully earned as provided herein and upon exercise by MGold at such time by giving SRC notice in writing of such exercise.
(b) Following exercise of the Option, MGold and SRC shall own the Properties jointly, subject to a joint venture agreement to be negotiated in good faith by the Parties (the “Joint Venture Agreement”). Each of MGold and SRC shall own 50% of the equity interest of the Joint Venture or the underlying Properties (as such Joint Venture may be structured) and shall have equal representation on the management committee of the Joint Venture. MGold shall be designated as the “operator” of the Joint Venture and shall plan and carry out such further exploration and/or development programs as the parties agree. MGold, as the operator, shall be entitled to management fees, as the parties agree, in connection with its role as operator.
(c) Upon exercise of the Option by MGold following satisfaction of the requirements and payments contemplated herein, SRC shall either (i) convey a 50% interest in the Properties to MGold, in which case the Parties would hold their respective interests as tenants in common or (ii) convey a 100% interest in the Properties to the Joint Venture entity to be formed by the Parties at such time.
Silver Queen Property – Option Requirements
In order to earn the right to exercise the Option for the Silver Queen Property, MGold shall incur Four Million Dollars ($4,000,000) in Option Costs over a thirty (30) month period and pay to SRC cash payments totaling Two Million Dollars ($2,000,000) as per the following Schedule:
Cash Payment Schedule for Silver Queen
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a)
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Upon completion of Financing1
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$ | 150,000 |
cash payment (Phase 1)
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b)
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at 6 month Anniversary2
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$ | 130,000 | |||
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c)
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at 12 month Anniversary
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$ | 170,000 | |||
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d)
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at 18 month Anniversary
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$ | 200,000 | |||
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e)
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at 24 month Anniversary
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$ | 350,000 | |||
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Subtotal
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$ | 1,000,000 | ||||
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3 months following completion of work
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$ | 1,000,000 |
(to continue to JV at 33 months)
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Total Cash
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$ | 2,000,000 | ||||
Work Completion Schedule for Silver Queen
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f)
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at 6 month Anniversary
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$ | 750,000 | |||
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g)
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at 12 month Anniversary
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$ | 650,000 | |||
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h)
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at 18 month Anniversary
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$ | 850,000 | |||
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i)
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at 24 month Anniversary
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$ | 1,150,000 | |||
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j)
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at 30 month Anniversary
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$ | 600,000 | |||
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Total Work Commitment
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$ | 4,000,000 |
Klondyke – Option Requirements
In order to earn the right to exercise the Option for the Klondyke Property, MGold shall incur One Million, Three Hundred and Fifty Thousand Dollars ($1,350,000) in Option Costs over a thirty (30) month period and pay to SRC cash payments totaling Two Hundred and Sixty-Five Thousand Dollars ($265,000) as per the following Schedule:
Cash Payment Schedule for Klondyke
1 The term, “Financing” refers to a private placement undertaken by MGold for gross proceeds of $1 million and expected to close in the month of September, 2011.
2 The term, “Anniversary,” in each case, refers to the anniversary of the closing of the Financing and the payment of the initial cash payments called for hereunder.
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m)
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at 12 month Anniversary
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$ | 25,000 | |||
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n)
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at 18 month Anniversary
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$ | 30,000 | |||
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o)
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at 24 month Anniversary
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$ | 30,000 | |||
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Subtotal
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$ | 140,000 | ||||
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3 months following completion of work
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$ | 125,000 |
(to continue to JV at 33 months)
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Total Cash
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$ | 265,000 | ||||
Work Completion Schedule for Klondyke
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p)
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at 6 month Anniversary
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$ | 250,000 | |||
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q)
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at 12 month Anniversary
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$ | 250,000 | |||
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r)
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at 18 month Anniversary
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$ | 250,000 | |||
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s)
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at 24 month Anniversary
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$ | 300,000 | |||
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t)
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at 30 month Anniversary
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$ | 300,000 | |||
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Total Work Commitment
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$ | 1,350,000 |
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2.
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Right to Drop Either Option
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At any time during the Option Period, MGold shall have the right to discontinue payments and advancement of Option Costs with respect to either of the Silver Queen Property or the Klondyke Property. In such event, MGold’s Option with respect to the other Property (as to which it continues to make payment and advance Option Costs) shall remain in full force and effect. SRC shall retain all payments made prior to discontinuance and shall have the benefit of the Option Costs expended prior to discontinuance. In the event that MGold discontinues either the Silver Queen Option or the Klondyke Option, MGold shall provide with such notice as is necessary to enable SRC to take over and maintain such Property.
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3.
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Conditions Precedent
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This Agreement is subject to (i) approval of the respective boards of MGold and SRC (ii) the successful completion of MGold’s brokered private placement of common shares for gross proceeds of a minimum of $1,500,000 and a maximum of $3,000,000, and (iii) all required regulatory approvals including the final approval of the TSX-Venture Exchange.
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4.
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Obligations of MGold During Option Period
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MGold shall be the operator of the Properties during the Option Period and shall comply with the following requirements as such operator.
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(a)
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During the period prior to full exercise of the Option (the “Option Period”), MGold shall do such acts, and shall pay as Option Costs (as defined in paragraph “e” below) including annual fees payable to the BLM (as defined below) and the State of Nevada and rents as may be required to keep the Properties in good standing.
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(b)
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All work conducted, carried out or performed by MGold on the Properties during the Option Period shall be done in a good and workmanlike manner to the best of its ability in accordance with good mining practice and in compliance with all applicable laws, including without limitation, all environmental laws and requirements of the United States Bureau of Land Management (the “BLM”).
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(c)
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During the Option Period, MGold shall maintain adequate insurance coverage in accordance with normal industry standards and practice, naming the Parties as insured and protecting the Parties from third party claims, and shall provide satisfactory evidence of such insurance to SRC. More specifically, prior to commencement of any work on the Properties and for the duration of this Agreement, MGold shall obtain a comprehensive policy of general liability insurance naming SRC and its affiliates as additional named insureds, insuring MGold and SRC (and its affiliates) against any liability commonly insured against and occasioned by accidents resulting from any act or omission on or about the Properties. Such policy shall be written by an insurance company qualified to do business in the State of Nevada and reasonably satisfactory to SRC. Such policy shall in no way limit SRC’s and MGold’s liability to each other under this Agreement. The policy shall be with limits of not less than $1 million in respect of any one person, in respect of any one accident and in respect of property damage and $2 million in the aggregate. Said limits shall be subject to periodic review and SRC shall have the right to increase said coverage limits if, in the reasonable opinion of SRC, said coverage becomes inadequate and is less than commonly maintained by operators undertaking similar work in the State of Nevada. At least 30 days prior to the expiration or termination date of any policy, MGold shall deliver a renewal or replacement policy with proof of the payment of the premium therefore. In addition, MGold shall ensure that all contractors performing work on the Properties carry appropriate liability and workers compensation insurance. To the extent that MGold’s employees or contractors perform work, or are present at the site of work, MGold shall carry workers compensation insurance, as required by law.
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(d)
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During the Option Period, MGold shall pay or cause to be paid all invoices for all materials and services purchased in connection with its work on the Properties that might give rise to a lien thereon. Should any such lien be recorded against the Properties or any part thereof in consequence of any work done thereon, MGold shall, on such occurrence becoming known to it, forthwith take active proceedings to have such lien removed and shall have the same removed with all reasonable dispatch, provided however that MGold may, in good faith, diligently contest any claim of lien. In no event shall MGold permit a lien to remain in place for more than 60 days. MGold shall notify SRC of any lien that remains for 30 days or more.
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During the Option Period, MGold shall provide SRC with; (A) quarterly reports within 30 days of the end of each quarter, indicating the status of all work on the Properties and a summary of all results obtained or received by MGold in connection with all work in respect of the Properties as well as a breakdown of all amounts expended and included as Work Commitment payments (“Option Costs”) incurred; (B) deliver an annual report on or before March 1 of each calendar year indicating all results obtained or received by MGold in connection with the work on the Properties and the compilation and interpretation thereof as well as a breakdown of the Option Costs incurred in carrying out such work reconciled with budget for the relevant approved program for such time period and conclusions of drilling results; (C) timely reports and information, including any technical reports prepared in accordance with applicable law, and forthwith upon the occurrence of any material results or other events, notice in reasonable detail, and will provide copies of relevant data, of such material results or events, (D) monthly reports during active periods when work is being conducted on the Properties and (E) within five (5) days of receipt, copies of drilling results and any and all technical reports of third parties relating to the Properties. Notwithstanding the prior time frames for reporting, in the event that MGold plans to publicly release information about its activities on the Property, including any drilling results assays or technical reports, MGold shall immediately provide copies of such results or reports to SRC.
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(f)
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During the Option Period, MGold shall permit SRC and its agents and representatives at their own risk and expense, access to the Property at all times and to all information obtained, results produced, samples, core and data collected and records, maps, sections and reports prepared by or on behalf of MGold in connection with any work done on or with respect to the Properties, provided that reasonable notice is given and that such access shall not unduly interfere with or disrupt the activities of MGold.
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SRC may advance payment of annual fees to the BLM and the appropriate counties in the State of Nevada required to maintain ownership of title to the Properties. If SRC so advances such payment, it will be reimbursed by MGold.
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5.
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Representations and Warranties
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Each Party represents and warrants to the other as follows and acknowledges and confirms that the others are relying on such representations and warranties in entering into this Agreement:
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a)
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it is a corporation duly incorporated, organized, validly existing and in good standing under the laws of its incorporating jurisdiction and is qualified to do business in those jurisdictions where necessary in order to carry out its purposes;
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b)
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it has full power, capacity and authority to enter into and perform its obligations under this Agreement and any agreement or instrument referred to or contemplated by this Agreement;
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c)
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the execution and delivery of this Agreement will not violate or result in the breach of any applicable law to which it is subject or the terms of its constating documents;
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d)
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neither the execution and delivery of this Agreement, nor the performance of the transactions contemplated hereunder, conflict with, result in the breach of or accelerate the performance required by any agreement to which it is a party;
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e)
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this Agreement and all other agreements or instruments to be executed and delivered by such Party hereunder have been duly executed and delivered by such Party and constitute, legal, valid and binding obligations of such Party enforceable against such Party in accordance with their respective terms;
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f)
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no consent from a lender or any third party (other than the TSX Venture Exchange) is necessary to authorize such Party to execute, deliver and perform its obligations under this Agreement;
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g)
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there is no judgment, decree, injunction, ruling or order of any court, governmental department, commission, agency, instrumentality or arbitrator and no claim, suit, action, litigation, arbitration or governmental proceeding in progress, pending or threatened, which prevents or which seeks to prevent such Party from entering into this Agreement; and
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h)
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it has not committed an act of bankruptcy, is not insolvent, has not proposed a compromise or arrangement to its creditors generally, has not had any petition for a receiving order in bankruptcy filed against it, has not made a voluntary assignment in bankruptcy, has not taken any proceedings with respect to a compromise or arrangement, has not taken any proceeding to have itself declared bankrupt or wound-up, has not taken any proceeding to have a receiver appointed of any part of its assets, has not had any encumbrancer take possession of any of its property and has not had any execution or distress become enforceable or become levied upon any of its property.
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6.
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Representations and Warranties of SRC
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SRC represents and warrants as follows to MGold and acknowledges and confirms that MGold is relying on such representations and warranties in entering into this Agreement:
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i.
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it is the registered and beneficial holder of a 100% legal and beneficial interest in the Properties, free and clear of any lien, pledge, mortgage, lease, sublease, charge, encumbrance or other security interest therein (other than Royalties);
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ii.
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Schedule A sets forth a true, accurate and complete description of the Properties;
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iii.
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it has made available to MGold all relevant information in its possession and control concerning title to the Properties and the Technical Data relating to the Properties;
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iv.
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to the best of its knowledge, the exploration and mining rights attaching to the Properties (as described in Schedule A) have been properly staked or otherwise properly constituted, as applicable, are properly recorded, and are valid and in good standing to the date hereof, in accordance with applicable laws and regulations of the BLM and the State of Nevada and all taxes and fees due thereon or in respect thereof to the date hereof have been paid in full or, in the case of fees that are currently accruing but not yet due, will be paid when due;
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v.
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it has not entered into any material agreements and has not made any material commitment in respect of the Propertyies;
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vi.
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to the best of its knowledge, and except as otherwise provided herein, there is no judgment, decree, injunction, ruling or order of any court, Governmental Authority, instrumentality or arbitrator and no claim, suit, action, litigation, arbitration or governmental proceeding in progress, pending or threatened against or relating to, and affecting any of the Properties which prevents or which seeks to prevent it from entering into and performing its obligations hereunder and the transaction contemplated hereby;
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vii.
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to the best of its knowledge, the Properties and the activities and operations that have been carried out thereon have been in compliance with all material respects with all applicable laws and regulations of the BLM and State of Nevada and it has not received notice of non-compliance from the BLM or State of Nevada;
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viii.
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it has not entered into any labour contracts, collective bargaining agreements, or any other labour-related obligations and liabilities which may affect the Properties or any operations conducted thereon;
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ix.
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to the best of its knowledge, there is no judicial or administrative proceeding pending and no environmental order has been issued or, to the best of its knowledge, threatened, concerning the possible violation of any environmental laws or environmental orders in respect of the Properties;
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x.
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except for bonds posted by SRC or its affiliate to back reclamation obligations imposed by the BLM in connection with exploration and drilling on the Properties, and except as otherwise specified in drill plans and exploration plans submitted by SRC or its affiliates to the BLM and the applicable regulations of the BLM, there are no outstanding obligations or liabilities, contingent or otherwise, under any applicable environmental, mining or other law, including reclamation or rehabilitation work, associated with the Properties or arising out of past exploration, development and/or mining activities carried out thereon.
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7.
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Representations and Warranties of MGold
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MGold represents and warrants as follows to SRC and acknowledges and confirms that SRC is relying on such representations and warranties and entering into this Agreement:
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i.
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MGold has the experience and expertise in the mining industry to meet its obligations under and pursuant to this Agreement, including, without limitation, the ability to act as the Operator when the Parties enter into the Joint Venture; and
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ii.
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MGold is not a “non-Canadian” within the meaning of the Investment Canada Act (Canada).
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8.
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Area of Interest
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Any interest or right to acquire any interest in mineral rights, including without limitation, claims, licenses, leases or other real property located within two (2) miles of the outside boundaries of each Property (the “Area of Interest”) by or on behalf of a Party or any affiliate of a Party to this Agreement during the term of this Agreement, shall be subject to the terms and provisions of this Agreement. The Parties shall notify each other promptly following any staking or acquisition within the Area of Interest.
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9.
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Reimbursement by MGold of Costs Incurred by MGold
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Upon completion of the Financing and at such time as MGold makes its initial cash payments as contemplated in Section 1, MGold shall also reimburse SRC for amounts incurred by SRC for the benefit of MGold including: (i) the title opinion provided by SRC following execution of the Letter of Intent, (ii) the cost or a revised technical report of Coast Mountain Geological Ltd. (iii) the cost of permitting for the Properties performed by Tetra Tech Inc. and (iv) reimbursement for the cost of SRC’s geologist from and after the date of the Letter of Intent and through the date hereof at such geologist’s daily or hourly rate, all these amounts, however, to be part of the Option Costs.
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10.
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Termination of the Option
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(a)
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Subject to the obligations of the Parties that expressly survive the termination of this Agreement, the Option and this Agreement shall automatically terminate:
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i)
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30 days after receipt by SRC of notice from MGold following the incurring of the initial $150,000 firm commitment, that MGold will not incur any additional Option Costs;
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ii)
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if MGold does not exercise the Option; and
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iii)
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upon the mutual consent of the Parties;
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MGold-SRC Option Agreement
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SRC shall have the right to terminate the Option and this Agreement: (i) in the event of a breach by MGold of its covenants contained in this Agreement or the representations and warranties of this Agreement; provided that MGold has not within 30 days following delivery of the said prior written notice of breach, cured such default or, if such default is not capable of being cured in 30 days, begun to cure such default within such 30 days and subsequently cured such default within 60 days thereafter; or (ii) forthwith if MGold shall generally not pay its debts as such debts become due or MGold shall admit in writing its inability to pay its debts generally as such debts become due or if MGold shall make a general assignment for the benefit of creditors or if any proceedings shall be instituted by or against MGold under any bankruptcy, insolvency or similar law. A termination of the Option and this Agreement by SRC under this subsection shall not be in derogation of SRC’s right to xxx for and recover damages at law or in equity.
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(c)
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Upon termination of the Option, MGold shall deliver to SRC all maps, reports, surveys and assays, drill core samples and other results of surveys and drilling and all other reports of information provided to MGold by SRC.
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(d)
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Upon termination of the Option, MGold shall remove all equipment brought on the Properties.
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(e)
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In the event that MGold terminates this Agreement for any reason or abandons the Option on either or both Properties or that it fails to make the payments and incur the Option Costs contemplated in Section 1 hereof or that this Agreement is breached by MGold or otherwise terminates for any reason, MGold shall nonetheless be responsible for all reclamation costs and liabilities arising from its activities on the Properties. To the extent that a bond provided by SRC or its affiliate is drawn upon by the BLM for expenses or costs related to the Properties, MGold shall reimburse SRC for the full amount of such draw-down
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11.
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Registration of this Agreement
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MGold will be entitled to register this Agreement in title to the Property
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12.
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Public Announcements
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All public announcements concerning the transactions contemplated by this Agreement (“press releases”) will be planned and coordinated by MGold. MGold will forward a draft of the press release to SRC for comments not less than five (5) business days in advance of the proposed time for the dissemination of the press release. In the event that MGold does not provide a full five (5) business days of advance notice, MGold shall delay the dissemination of its press release to order to give SRC a full five (5) business days of prior notice. MGold’s draft press releases shall be accompanied by any reports, drilling results or materials provided by third parties that are referenced in or relied upon by MGold in its proposed draft press release and that have not been previously provided to SRC in accordance with other provisions of this Agreement. No Party may act unilaterally in the dissemination of a press release related to the Properties without prior approval of the other (such approval not to be unreasonably withheld) except in the event that a Party is compelled by law or by applicable regulations or policies of any governmental or regulatory agency or a stock exchange.
MGold-SRC Option Agreement
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13.
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Arbitration in Calgary, Alberta
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The Parties agree to make best efforts to settle any and all disputes or disagreements arising under or associated with this Agreement or the Property through good faith negotiation. In the event that such a dispute cannot be resolved through negotiation, all disputes between the Parties concerning, arising under, or associated with this Agreement or the Properties or related hereto, shall first be arbitrated and finally resolved pursuant to the National Arbitration Rules of the ADR Institute of Canada, Inc.
The Parties agree that (i) the arbitration will take place in Calgary, Alberta, (ii) there shall be no more than one arbitrator for any dispute where the amount in controversy is less than $100,000 and there shall be three (3) arbitrators for any dispute where any Party’s claim exceeds $100,000 and (iii) each Party shall pay his separate expenses of the arbitration, including the fees and disbursements of his accountants and attorneys.
The judgment on the award rendered by the arbitrator(s) may be entered in, and enforced by, any court having jurisdiction thereof.
It is the intent of the Parties that, barring extraordinary circumstances, arbitration proceedings will be concluded within 60 days from the date the arbitrator(s) are appointed. The arbitral tribunal may extend this time limit in the interests of justice. Failure to adhere to this time limit shall not constitute a basis for challenging the award.
Consistent with the expedited nature of arbitration, pre-hearing information exchange shall be limited to the reasonable production of relevant, non-privileged documents, carried out expeditiously. Each Party will, upon the written request of the other Party, promptly provide the other with copies of documents relevant to the issues raised by any claim or counterclaim. Any dispute regarding discovery, or the relevance or scope thereof, shall be determined by the arbitrator (if there is one arbitrator) or the chair of the arbitration panel (if there are three arbitrators) which determination shall be conclusive. All discovery shall be completed within thirty (30) days following appointment of the arbitrator(s).
In the event that there is one arbitrator, the arbitrator shall be a practicing attorney actively engaged in the practice of law for at least ten (10) years and having familiarity with the mining industry. In the event that there is a panel of three arbitrators, at least two of the arbitrators shall be practicing attorneys actively engaged in the practice of law for at least ten (10) years and at least one arbitrator shall have experience and knowledge related to the mining industry.
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14.
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Payments
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All payments from MGold to SRC to be made hereunder shall be made to SRC or its designee which may be SRC’s parent company, Infrastructure Materials Corp. All references to Dollars or “$” herein are to Canadian Dollars.
MGold-SRC Option Agreement
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15.
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Construction
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Whenever the singular is used in this Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa. The headings in this Agreement are for convenience only and are in no way intended to describe, interpret, define or limit the scope, extent or intent of this Agreement or any of its provisions.
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16.
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Waivers
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The failure of any Party to seek redress for default of or to insist upon the strict performance of any covenant or condition of this Agreement shall not prevent a subsequent act, which would have originally constituted a default, from having the effect of an original default.
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17.
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Rights and Remedies Cumulative
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The rights and remedies provided by this operating Agreement are cumulative and the use of any one right or remedy by any Party shall not preclude or waive the right to use any other remedy. Said rights and remedies are given in addition to any other legal rights the parties may have.
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18.
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Entire Agreement
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This Agreement contains the entire understanding among the Parties with respect to the subject matter hereof and supersedes any prior understandings and agreements, including the Letter of Intent, whether written or oral, with respect to such subject matter. This Agreement may be amended by mutual agreement of the Parties evidenced in a written amendment.
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19.
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Successors and Assigns
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This Agreement will enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. This Agreement may not be assigned by either party without the prior written consent of the other party. Notwithstanding the foregoing, SRC may assign this Agreement to its parent company, Infrastructure Materials Corp. No Party may transfer, assign or dispose of, in whole or in part, directly or indirectly, its interest in the Properties.
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20.
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Counterparts
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This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.
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21.
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Expenses
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Each Party is responsible for their own legal, accounting, advisory and other expenses incurred in connection with the transactions contemplated herein.
MGold-SRC Option Agreement
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22.
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Confidentiality
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Except as otherwise provided hereunder, the Parties agree to treat all information, data, reports and other records relating to the Properties (collectively, the “Information”) as confidential and will not disclose such Information except in accordance with Section 8 of this Agreement (Public Announcements). Information that is in the public domain shall not be considered confidential.
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23.
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Notices
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Any notice, direction or other instrument required or permitted to be given hereunder will be in writing and given by personal delivery or by delivering or sending it by facsimile or other similar form of communication addressed:
(a) To MGold at:
00 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
Attention: Xxxx Scodnick, President and CEO
Telephone: (000) 000-0000
Telefax: (000) 000-0000
with a copy, which shall not constitute notice, to:
Xxxxxx, de Xxxxx L.L.P.
0, Xxxxx Xxxxx-Xxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telefax: (000) 000-0000
MGold-SRC Option Agreement
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(b) To SRC at:
Suite 207B – 0000 Xxxxxxxx Xxx
Xxxx, Xxxxxx 00000
X.X.X.
Attention: Xxxx Xxxxxxxxxx, CEO
Telephone: 000-000-0000
Telefax : 000-000-0000
with a copy, which shall not constitute notice to:
Kavinoky Xxxx LLP
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxx Xxxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
Any such notice, direction or other instrument given as aforesaid will be deemed to have been effectively given, if sent by facsimile or other similar form of telecommunication, on the next business day following such transmission or, if delivered, to have been received on the date of such delivery. Any Party may change its address for service from time to time by notice given in accordance with the foregoing and any subsequent notice will be sent to such Party at its changed address.
|
|
24.
|
Applicable Law
|
This Agreement is governed by Alberta Law.
|
|
25.
|
Joint Venture
|
The Parties shall undertake in good faith to negotiate and execute a joint venture agreement within sixty (60) days of the full execution of this Agreement. However, failure to execute such a joint venture agreement within such time shall not be considered a breach hereunder by either Party.
MGold-SRC Option Agreement
- 14 -
IN WITNESS WHEREOF the Parties have duly executed this Agreement as of the year and date set forth on the first page of this Agreement.
|
MGOLD RESOURCES INC.
|
|||
|
By:
|
/s/ Xxxx Scodnick
|
||
|
Name: Xxxx Scodnick
|
|||
|
Title: President and CEO
|
|||
|
SILVER RESERVE CORP.
|
|||
|
By:
|
/s/ Xxxx Xxxxxxxxxx
|
||
|
Name: Xxxx Xxxxxxxxxx
|
|||
|
Chief Executive Officer
|
|||
MGold-SRC Option Agreement
- 15 -
SCHEDULE A
SILVER QUEEN PROPERTY
KLONDYKE PROPERTY
Note: This Schedule shall include two related patented claims covered by a Mineral Lease Agreement dated May 30, 2008 between Xx. Xxxxxx Xxxxxx Xxxxxxx of Normandy Park, WA and Silver Reserve Corp. upon receipt of the required consent of the lessor.
SILVER QUEEN PROPERTY
Sections 13, 14, 23, 24, 25, 36, T 2 S, R 37 E, MDB&M
Sections 18, 19, 30, 31, T 2 S, R 38 E, MDB&M
Xxxxxxxxx County, Nevada
Claim Name County File No. BLM NMC
|
SQ 1
|
160296
|
870453
|
|
SQ 2
|
169136
|
969847
|
|
SQ 3
|
169137
|
969848
|
|
SQ 4
|
169138
|
969849
|
|
SQ 5
|
169139
|
969850
|
|
SQ 6
|
160297
|
870454
|
|
SQ 7
|
160298
|
870455
|
|
SQ 8
|
160299
|
870456
|
|
SQ 9
|
160300
|
870457
|
|
SQ 10
|
160301
|
870458
|
|
SQ 11
|
160302
|
870459
|
|
SQ 12
|
160303
|
870460
|
|
SQ 13
|
160304
|
870461
|
|
SQ 14
|
160305
|
870462
|
|
SQ 15
|
160306
|
870463
|
|
SQ 16
|
160307
|
870464
|
|
SQ 17
|
160308
|
870465
|
|
SQ 18
|
160309
|
870466
|
|
SQ 19
|
160310
|
870467
|
|
SQ 20
|
160311
|
870468
|
|
SQ 21
|
160312
|
870469
|
|
SQ 22
|
160313
|
870470
|
|
SQ 23
|
160314
|
870471
|
|
SQ 24
|
160315
|
870472
|
|
SQ 25
|
160316
|
870473
|
|
SQ 26
|
160317
|
870474
|
|
SQ 27
|
160318
|
870475
|
|
SQ 28
|
160319
|
870476
|
|
SQ 29
|
160320
|
870477
|
|
SQ 30
|
160321
|
870478
|
|
SQ 31
|
160322
|
870479
|
|
SQ 32
|
160323
|
870480
|
|
SQ 33
|
160324
|
870481
|
|
SQ 34
|
160325
|
870482
|
|
SQ 35
|
160326
|
870483
|
|
SQ 36
|
160327
|
870484
|
|
SQ 37
|
160328
|
870485
|
|
SQ 38
|
160329
|
870486
|
|
SQ 39
|
160330
|
870487
|
|
SQ 40
|
160331
|
MGold-SRC Option Agreement
- 17 -
|
SQ 41
|
160332
|
870489
|
|
SQ 42
|
160333
|
870490
|
|
SQ 43
|
160334
|
870491
|
|
SQ 44
|
160335
|
870492
|
|
SQ 45
|
160336
|
870493
|
|
SQ 46
|
160337
|
870494
|
|
SQ 47
|
160338
|
870495
|
|
SQ 48
|
160339
|
870496
|
|
SQ 49
|
160340
|
870497
|
|
SQ 50
|
160341
|
870498
|
|
SQ 51
|
160342
|
870499
|
|
SQ 52
|
160343
|
870500
|
|
SQ 53
|
160344
|
870501
|
|
SQ 54
|
160345
|
870502
|
|
SQ 55
|
160346
|
870503
|
|
SQ 56
|
160347
|
870504
|
|
SQ 57
|
160348
|
870505
|
|
SQ 58
|
160349
|
870506
|
|
SQ 59
|
160350
|
870507
|
|
SQ 60
|
160351
|
870508
|
|
SQ 61
|
160352
|
870509
|
|
SQ 62
|
160353
|
870510
|
|
SQ 63
|
160354
|
870511
|
|
SQ 64
|
160355
|
870512
|
|
SQ 65
|
160356
|
870513
|
|
SQ 66
|
160357
|
870514
|
|
SQ 67
|
160358
|
870515
|
|
SQ 68
|
160359
|
870516
|
|
SQ 69
|
160360
|
870517
|
|
SQ 70
|
160361
|
870518
|
|
SQ 71
|
160362
|
870519
|
|
SQ 72
|
160363
|
870520
|
|
SQ 73
|
160364
|
870521
|
|
SQ 74
|
160365
|
870522
|
|
SQ 75
|
160366
|
870523
|
|
SQ 76
|
160367
|
870524
|
|
SQ 77
|
160368
|
870525
|
|
SQ 78
|
160369
|
870526
|
|
SQ 79
|
160370
|
870527
|
|
SQ 80
|
160371
|
870528
|
|
SQ 81
|
160372
|
870529
|
|
SQ 82
|
160373
|
870530
|
|
SQ 83
|
160374
|
870531
|
|
SQ 84
|
160375
|
870532
|
|
SQ 85
|
160376
|
870533
|
|
SQ 86
|
160377
|
MGold-SRC Option Agreement
- 18 -
|
SQ 87
|
160378
|
870535
|
|
SQ 88
|
168945
|
966963
|
|
SQ 89
|
168946
|
966964
|
|
SQ 90
|
168947
|
966965
|
|
SQ 91
|
168948
|
966966
|
|
SQ 92
|
168949
|
966967
|
|
SQ 93
|
168950
|
966968
|
|
SQ 94
|
168951
|
966969
|
|
SQ 95
|
168952
|
966970
|
|
SQ 96
|
168953
|
966971
|
|
SQ 97
|
168954
|
966972
|
|
SQ 98
|
168955
|
966973
|
|
SQ 99
|
168956
|
966974
|
|
SQ 000
|
000000
|
000000
|
|
SQ 101
|
168958
|
966976
|
|
SQ 102
|
168959
|
966977
|
|
SQ 103
|
168960
|
966978
|
|
SQ 104
|
168961
|
966979
|
|
SQ 105
|
168962
|
966980
|
|
SQ 106
|
168963
|
966981
|
|
SQ 107
|
168964
|
966982
|
|
SQ 108
|
168965
|
966983
|
|
SQ 109
|
168966
|
966984
|
|
SQ 110
|
168967
|
966985
|
|
SQ 111
|
168968
|
966986
|
|
SQ 112
|
168969
|
966987
|
|
SQ 113
|
168970
|
966988
|
|
SQ 000
|
000000
|
000000
|
|
SQ 115
|
168972
|
966990
|
|
SQ 116
|
168973
|
966991
|
|
SQ 117
|
168974
|
966992
|
|
SQ 118
|
168975
|
966993
|
|
SQ 119
|
168976
|
966994
|
|
SQ 120
|
168977
|
966995
|
|
SQ 121
|
168978
|
966996
|
|
SQ 122
|
168979
|
966997
|
|
SQ 123
|
168980
|
966998
|
|
SQ 124
|
168981
|
966999
|
|
SQ 125
|
168982
|
967000
|
|
SQ 126
|
168983
|
967001
|
|
SQ 127
|
168984
|
967002
|
|
SQ 128
|
168985
|
967003
|
|
SQ 129
|
168986
|
967004
|
|
SQ 000
|
000000
|
000000
|
|
SQ 131
|
168988
|
967006
|
|
SQ 132
|
168989
|
MGold-SRC Option Agreement
- 19 -
|
SQ 133
|
168990
|
967008
|
|
SQ 134
|
168991
|
967009
|
|
SQ 135
|
168992
|
967010
|
|
SQ 136
|
168993
|
967011
|
|
SQ 137
|
168994
|
967012
|
|
SQ 138
|
168995
|
967013
|
|
SQ 139
|
168996
|
967014
|
|
SQ 140
|
168997
|
967015
|
|
SQ 141
|
168998
|
967016
|
|
SQ 142
|
168999
|
967017
|
|
SQ 143
|
170039
|
986543
|
|
SQ 144
|
169142
|
969852
|
|
SQ 145
|
169143
|
969853
|
145 MINING CLAIMS
MGold-SRC Option Agreement
- 20 -
KLONDYKE PROPERTY
Sections 24, 25, 26, 35, 36, T 1 N, R 42 E, MDB&M
Sections 19, 29, 30, 31, 32, T 1 N, R 43 E, MDB&M
Sections 5, 6, T 1 S, R 43 E, MDB&M
Xxxxxxxxx County, Nevada
Claim Name Book Page County File No. BLM NMC
|
KD 1
|
226
|
357
|
159954
|
867448
|
|
2
|
000
|
000
|
000000
|
0000000
|
|
3
|
226
|
359
|
159956
|
867450
|
|
4
|
301
|
340
|
181577
|
1039915
|
|
5
|
226
|
361
|
159958
|
867452
|
|
6
|
000
|
000
|
000000
|
0000000
|
|
7
|
226
|
363
|
159960
|
867454
|
|
8
|
301
|
342
|
181579
|
1039917
|
|
9
|
226
|
000
|
000000
|
000000
|
|
10
|
000
|
000
|
000000
|
0000000
|
|
11
|
226
|
367
|
159964
|
867458
|
|
12
|
301
|
344
|
181581
|
1039919
|
|
13
|
301
|
345
|
181582
|
1039920
|
|
14
|
226
|
370
|
159967
|
867461
|
|
15
|
301
|
346
|
181583
|
1039921
|
|
16
|
226
|
372
|
159969
|
867463
|
|
17
|
301
|
347
|
000000
|
0000000
|
|
18
|
226
|
374
|
159971
|
867465
|
|
19
|
301
|
348
|
181585
|
1039923
|
|
20
|
226
|
376
|
159973
|
867467
|
|
21
|
226
|
377
|
159974
|
867468
|
|
22
|
226
|
378
|
159975
|
867469
|
|
23
|
301
|
349
|
181586
|
1039924
|
|
24
|
226
|
380
|
159977
|
867471
|
|
25
|
226
|
381
|
159978
|
867472
|
|
26
|
301
|
350
|
181587
|
1039925
|
|
27
|
226
|
383
|
159980
|
867474
|
|
28
|
301
|
351
|
181588
|
1039926
|
|
29
|
226
|
385
|
159982
|
867476
|
|
30
|
301
|
352
|
181589
|
1039927
|
|
31
|
226
|
387
|
159984
|
867478
|
|
32
|
301
|
000
|
000000
|
0000000
|
|
33
|
226
|
389
|
159986
|
867480
|
|
34
|
301
|
354
|
181591
|
1039929
|
|
35
|
226
|
391
|
159988
|
867482
|
|
36
|
301
|
355
|
181592
|
1039930
|
|
37
|
226
|
393
|
159990
|
867484
|
|
38
|
301
|
356
|
181593
|
1039931
|
|
39
|
301
|
357
|
000000
|
MGold-SRC Option Agreement
- 21 -
|
40
|
226
|
396
|
159993
|
867487
|
|
41
|
301
|
358
|
181595
|
1039933
|
|
42
|
301
|
359
|
181596
|
1039934
|
|
43
|
226
|
399
|
159996
|
867490
|
|
44
|
301
|
360
|
181597
|
1039935
|
|
45
|
226
|
401
|
159998
|
867492
|
|
46
|
301
|
361
|
181598
|
1039936
|
|
47
|
226
|
403
|
160000
|
867494
|
|
48
|
301
|
362
|
181599
|
1039937
|
|
49
|
226
|
405
|
160002
|
867496
|
|
50
|
000
|
000
|
000000
|
0000000
|
|
51
|
226
|
407
|
160004
|
867498
|
|
52
|
301
|
364
|
181601
|
1039939
|
|
53
|
226
|
409
|
160006
|
867500
|
|
54
|
301
|
365
|
181602
|
1039940
|
|
55
|
226
|
411
|
160008
|
867502
|
|
56
|
301
|
366
|
181603
|
1039941
|
|
57
|
301
|
367
|
000000
|
0000000
|
|
58
|
301
|
368
|
181605
|
1039943
|
|
59
|
301
|
000
|
000000
|
0000000
|
|
60
|
301
|
370
|
181607
|
1039945
|
|
61
|
301
|
371
|
181608
|
1039946
|
|
62
|
301
|
372
|
181609
|
1039947
|
|
63
|
301
|
373
|
181610
|
1039948
|
|
69
|
301
|
374
|
181611
|
1039949
|
|
70
|
301
|
375
|
181612
|
1039950
|
|
71
|
301
|
376
|
181613
|
1039951
|
|
72
|
301
|
377
|
000000
|
0000000
|
|
73
|
301
|
378
|
181615
|
1039953
|
|
74
|
301
|
379
|
181616
|
1039954
|
|
75
|
246
|
198
|
165617
|
936129
|
|
76
|
301
|
000
|
000000
|
0000000
|
|
77
|
246
|
200
|
165619
|
936131
|
|
78
|
301
|
381
|
181618
|
1039956
|
|
79
|
301
|
000
|
000000
|
0000000
|
|
80
|
301
|
383
|
181620
|
1039958
|
|
81
|
301
|
000
|
000000
|
0000000
|
|
82
|
301
|
385
|
181622
|
1039960
|
|
83
|
301
|
386
|
181623
|
1039961
|
|
87
|
301
|
387
|
000000
|
0000000
|
|
97
|
301
|
388
|
181625
|
1039963
|
|
98
|
256
|
264
|
168173
|
964631
|
|
99
|
301
|
389
|
181626
|
1039964
|
|
000
|
000
|
000
|
000000
|
964633
|
|
000
|
000
|
000
|
181627
|
1039965
|
|
102
|
256
|
268
|
168177
|
MGold-SRC Option Agreement
- 22 -
|
104
|
256
|
270
|
168179
|
964637
|
|
105
|
256
|
271
|
168180
|
964638
|
|
106
|
301
|
391
|
181628
|
1039966
|
|
107
|
301
|
392
|
181629
|
1039967
|
|
108
|
256
|
274
|
168183
|
964641
|
|
109
|
256
|
275
|
168184
|
964642
|
|
000
|
000
|
000
|
000000
|
1039968
|
|
111
|
256
|
277
|
168186
|
964644
|
|
112
|
301
|
394
|
181631
|
1039969
|
|
113
|
256
|
279
|
168188
|
964646
|
|
114
|
301
|
395
|
181632
|
1039970
|
|
115
|
256
|
281
|
168190
|
964648
|
|
116
|
301
|
396
|
181633
|
1039971
|
|
117
|
256
|
283
|
168192
|
964650
|
|
118
|
301
|
397
|
000000
|
0000000
|
|
000
|
000
|
000
|
168193-1
|
964652
|
|
120
|
301
|
398
|
181635
|
1039973
|
|
000
|
000
|
000
|
168195
|
964654
|
|
122
|
301
|
399
|
181636
|
1039974
|
|
000
|
000
|
000
|
000000
|
964656
|
|
129
|
301
|
000
|
000000
|
0000000
|
|
130
|
301
|
401
|
181638
|
1039976
|
|
131
|
301
|
000
|
000000
|
0000000
|
|
132
|
256
|
298
|
168206
|
964665
|
|
133
|
301
|
403
|
181640
|
1039978
|
|
134
|
256
|
300
|
168208
|
964667
|
|
143
|
301
|
000
|
000000
|
0000000
|
|
150
|
256
|
315
|
168223
|
964682
|
|
157
|
301
|
405
|
181642
|
1039980
|
|
164
|
301
|
406
|
181643
|
1039981
|
|
165
|
301
|
407
|
000000
|
0000000
|
|
000
|
000
|
000
|
181645
|
1039983
|
|
000
|
000
|
000
|
168240
|
964699
|
118 MINING CLAIMS
Additional Klondyke Claims
|
Tattoo U
|
145951
|
737072
|
|
Tattoo Me
|
145952
|
737071
|
Note: This Schedule shall include two related patented claims covered by a Mineral Lease Agreement dated May 30, 2008 between Xx. Xxxxxx Xxxxxx Xxxxxxx of Normandy Park, WA and Silver Reserve Corp. upon receipt of the required consent of the lessor.
MGold-SRC Option Agreement
- 23 -
